Maternity retailer Mothercare has issued a profits warning as consumer confidence continues to deteriorate following the riots in England.
Chief executive Ben Gordon said its UK performance was “well below expectations” as its domestic like-for-likes plummeted 9.6% in the 12 weeks to October 1 and total UK sales dipped 6.4%.
Gordon said: “We believe that the outlook for the UK business in the important second half has materially worsened and this is likely to lead to a disappointing performance for the year as a whole.”
The Mothercare boss said consumer confidence had dipped following the riots in August and trading had further detoriated in the last four weeks.
The retailer’s home and travel category had been worse affected as customers were trading down on bigger ticket items. The retailer insisted it has held market share but it had a significant impact on its Direct business, which were down 6.9% over the 12 week period.
Mothercare’s total group sales were up 4.9% over the period as its international retail sales soared 17%.
For the 27 weeks to October 1 total group sales were up 4.9% and UK like-for-likes were down 6.8%, with Direct sales down 2%.
Gordon said that the restructure of its UK property portfolio and cost saving programme were progressing well and insisted its financial position remains robust due to its strong international arm.
He said: “Despite the difficult trading conditions in the UK, our strategy of focusing on the rapid global expansion of our brands whilst restructuring the UK business will create long-term sustainable value for shareholders.”